Accounting for Health Insurance paid for in advance while health ins liability account builds throughout the month

Hey there, @bainmeister. 

It's great to see you back in the Community. Allow me to point you in the right direction to figure out a better way to categorize the health insurance expense. 

Based on the details you gave, I recommend consulting with your accountant on this situation. They'll be able to give you the best accounting advice for your business. 

Keep us updated on what you and your accountant decide is right for you. We're only a comment away. Take care! 

This is not really a solution. Thank you, but I am waiting on a solution.

I know this is 2 years too late for you, but in case it helps someone else, here's what I ended up doing:

1. create an "other asset" account called "prepaid payroll expenses"

2. create a liability account called "payroll health insurance liabilities" (or just use your regular payroll liability acct)

3. Set up a "company contribution" payroll item for the company paid health insurance to point to the "payroll health insurance liabilities" account (you can also do the same for the "deduction" payroll item tracking any employee contributions).

3. When you pay your premium bill, enter it using the "Prepaid payroll expenses" account.

4. When you pay payroll each month, enter the appropriate amount of company contribution and employee contribution on each employee's paycheck (you can set this up on the employee set up window so that it auto enters with a default amount each month). 

      -This amount will be the total you pay for the employee for the year divided by the # of payrolls you have

      -If you have biweekly payroll, you can consider only entering the amounts on the first 2 payrolls of each month so that your amounts are the same each month.

5. After you run payroll each time, you'll open the pay liabilities window and "pay" your health insurance liabilities--this will pull up a liability pmt window showing the value of the health insurance that was used this payroll on people's paychecks.  However, you've already paid this!  So...

       -If the liability check doesn't automatically open up for you to edit, you'll need to go to the vendor and open up the liability check.

       -Next, zero out the "total" on the check (leave the correct amt on the "payroll liabilities" tab (below the check itself)

       -Then click over to the "expenses" tab and enter a NEGATIVE of your payment in the "prepaid payroll expenses" account, effectively "paying" this check from your prepaid expenses (thus making the total value = $0.

       -This whole process will decrease the value of your prepaid expenses and decrease the amt owed on your payroll liabilities.  BOOM.

6. At year end, you'll likely need to enter a reconciliation adjustment in the "prepaid expenses" account to adjust for any rounding differences and/or changes due to employees leaving midway through the year.

Hope this helps someone else...